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BHP Billiton CEO targets 70% value uplift; Marubeni's FY'16 profit declines 41.0% YOY; Kinross Gold widens Q1 loss

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


BHP Billiton CEO targets 70% value uplift; Marubeni's FY'16 profit declines 41.0% YOY; Kinross Gold widens Q1 loss

TOP NEWS

CEO AndrewMackenzie outlined a plan to potentially increase the value of the company by 70% via costcutting, boosting efficiencies and betting on a handful of oil, copper andpotash growth assets. During an investor conference, he indicated that he wouldnot wait for a bounce in metal prices to expand the company; he also dampenedspeculation that BHP Billiton would seek to take advantage of record-low miningvaluations and a swell of distressed asset sales by buying new mines.

MarubeniCorp.'s profit attributable to owners of the parentdeclined to ¥62.26billion for the year ended March 2016, down 41.0% from ¥105.60 billion a yearago, as the company incurred impairment losses mainly due to deterioratedresource prices. The company's energy and metals segment widened itsattributable loss to ¥144.0 billion, from the loss of ¥30.7 billion in theprevious fiscal year.

posted afirst-quarter net loss attributable to shareholders of US$13.9 million,widening from a lossof US$6.7 million reported a year ago. The dual-listed major attributed theincreased loss to a lower average realized gold price, which fell to US$1,179per ounce during the quarter, from US$1,218 per ounce a year earlier.

DIVERSIFIED

*BHP Billiton GroupCEO Andrew Mackenzie outlined a plan to potentially of the company by 70%via cost cutting, boosting efficiencies and betting on a handful of oil, copperand potash growth assets. During an investor conference, he indicated that hewould not wait for a bounce in metal prices to expand the company; he also dampenedspeculation that BHP Billiton would seek to take advantage of record-low miningvaluations and a swell of distressed asset sales by buying new mines.

* MarubeniCorp.'s profit attributable to owners of the parentdeclined to ¥62.26billion for the year ended March 2016, down 41.0% from ¥105.60 billion a yearago, as the company incurred impairment losses mainly due to deterioratedresource prices. The company's energy and metals segment widened itsattributable loss to ¥144.0 billion, from the loss of ¥30.7 billion in theprevious fiscal year.

*Vale SA is standingby its plans to sell offUS$10 billion worth of core assets in a bid to strengthen its balance sheet,despite a recent rise in the prices of commodities. Between US$4 billion toUS$5 billion worth of noncore assets this year is targeted for divestment,which was down from the previously flagged US$4 billion to US$5.5 billion afterthe company failed to sell off its 40% stake in bauxite producer .

*Fitch Ratings downgradedVale SA andBHP Billiton Groupjoint venture Samarco MineraçãoSA's long-term foreign-currency and long-term local-currency issuerdefault ratings as well as its senior unsecured debt ratings to CCC from BB-,based on the assumption that it will not secure the required licenses torestart operations by the end of the year and will run out of cash to supporttimely payments to creditors within the next five months. In addition, Fitchremoved the ratings from Negative Watch.

*Glencore Plc saidrecord-low sector margins are settingthe scene for the next price upswing as current margins cannot sustainpresent production levels over the medium term and structural deficits arereturning, led by zinc. Meanwhile, supply challenges for copper and zinc remaindue to resource quality and scarcity at current prices.

BASE METALS

* The Andalucian government of Spainformally grantedKimberley DiamondsLtd. the Lomero copper-gold project. The company is evaluatingthe potential for a profitable redevelopment of Lomero through its wholly ownedSpanish subsidiary, Alto Minerals SL.

* Amur Minerals Corp. said exploration at its deposit inRussia over the past year has resulted in an over 100% increase in measured and indicated resourcessince last April, from 52.9 million tonnes to 107.2 million tonnes, containing484,100 tonnes of nickel and 136,600 tonnes of copper.

* Sherritt International Corp. expressedconfidence that it can avert a restructuring despite its C$2.1 billion debt,versus just C$370 million cash as of March, and low nickel prices, the Financial Post reported.

* The Glencore- and -owned copper mine inChile and Teck ResourcesLtd. agreed to shareresources and infrastructure, Reuters reported.

*Democratic Republic of Congo state miner GecaminesSARL plans to investigateFreeport-McMoRanInc.'s sale of its majority interest in the copper projectin the country to ChinaMolybdenum Co. Ltd., Reuters reported. Gecamines, which holds a 20%stake in the project, said it "will assert its rights."

*Malaysia Smelting Corp.Bhd. posted its best quarterly performance in two years in thefirst quarter with net profit of 24.9 million Malaysian ringgit, The Star reported.The miner also said that although tin prices had somewhat improved, marketconditions remained challenging.

* Experts surveyed by Chile's coppercommission Cochilco projectedthe price of copper to average US$2.19 per pound this year, compared with theUS$2.43 per pound estimated in the October 2015 survey, Economía y Negocios reported.

PRECIOUS METALS

*Kinross Gold Corp.posted a first-quarter net loss attributable to shareholders of US$13.9million, wideningfrom a loss of US$6.7 million reported a year ago. The dual-listed majorattributed the increased loss to a lower average realized gold price, whichfell to US$1,179 per ounce during the quarter, from US$1,218 per ounce a yearearlier.

*The Ministry of Mining said there are notraces left of the cyanide spill on the rivers affected by the incident atBarrick Gold Corp.'sVeladero goldmine in Argentina, Diario de Cuyo reported.The comments by the ministry came after the release of a study, conductedbetween October 2015 and November 2015 by UN agency UNOPS, which found sludgeconcentrations of cyanide and metals in the riverbed of river Potrerillos.The report said even though the UN study recommends the removal of certain sludgeconcentrations it detected, a ministry representative said the affected areashave naturally recovered from the incident.

* XtractResources Plc said the total gold resource at the project in Mozambique increasedby 36% to 17.3 million tonnes at 2.26 g/t of gold for 1.3 million ounces ofgold, upon the addition of the resource at the Fair Bride gold deposit.

*The government of Thailand has ordered Kingsgate Consolidated Ltd.'s operating subsidiary AkaraResources to shut downoperations at the Chatree gold mine and metallurgical plant by the end of2016 and start the rehabilitation process. The government claims that theenvironmental and health problems caused by Chatree outweigh its economicbenefit.

*Genius PropertiesLtd. acquired a 100% interest in nine mineral explorationproperties covering various mineral showings in Nova Scotia from two arm'slength prospectors associated with 21Alpha Gold Resources.

BULK COMMODITIES

* U.S. Steel Corp. launched to purchase for cash up toa total of US$500 million aggregate principal amount of its outstanding 7.000%senior notes due 2018, 7.375% senior notes due 2020 and 6.875% senior notes due2021.

* Data compiled by Bloomberg showed thatover half of all global coal assets are held by companies either undergoingbankruptcy or lacking money to pay their interest bill, Bloomberg News reported.

*K+S AG's revenues forthe first quarter slumped20% year over year to €1.10 billion due to deteriorating sales inthe potash and magnesium units, as well as lower average prices. EBITDA alsoslid 26% to €285 million while operating earnings fell by 31% to €218 million.Sales, meanwhile, totaled 1.69 million tons, down from 1.94 tons recorded ayear earlier due to pre-purchasing of specialties in Europe in December 2015and a slower seasonal start.

*ThyssenKrupp AGlowered its full-yearadjusted EBIT forecast to total at least €1.4 billion as difficult materialsmarkets continue to weigh on performance. The company posted a net loss of €9million in the first half of its fiscal year, with its adjusted EBIT in theperiod dropping to €560 million from €722 million in the preceding year.

* Inline with expectations, Mitsubishi Corp. swung to a net loss attributable to owners of the parentof ¥149.40 billion for the year ended March 31, compared to a year-ago profitof ¥400.57 billion. Revenues fell 9.7% to ¥6.926 trillion, resulting in pretaxloss of ¥92.82 billion. Loss per share was ¥93.68, compared to EPS of ¥245.83 ayear ago. The Japanese trading house booked an impairment charge of ¥426billion, including ¥41 billion from the nonresources business.

*Mitsui & Co.Ltd.'s mineral and metal resources segment attributable toshareholders of ¥162.5 billion in the fiscal year ended March 31, from a profitof ¥60.9 billion a year ago, amid lower iron ore prices. Meanwhile, the Mitsuigroup swung to a loss attributable to shareholders of ¥83.41 billion comparedto a profit of ¥306.49 billion a year ago.

*Norsk Hydro ASA andVale SA haveterminatednegotiations for the sale of Vale's 40% stake in , or MRN — abauxite producer in Brazil. In October 2015, the companies entered into aletter of intent for the potential transaction, but could not agree on commercialterms.

*Aluminum Corp. of ChinaLtd. plans to investin a light alloy materials project in China's Guangxi province, and plans tofurther inject capital of about 992 million Chinese yuan into Guangxi Hualei.

*Yanzhou Coal Mining Co.Ltd. has entered into thermal coalsale contracts covering 7.2 million tonnes of thermal coal within China'sShandong province for the current year.

*POSCO unit Hume Coalhas expresseddisappointment at the Land and Environment Court of New South Wales'decision to block land access in the Australian state, noting that it has beenexploring for coal on behalf of the state government and people of NSW since2011. "Prior to commencing exploration in this region, Hume Coal wasmindful of the setting in which we are operating, therefore much time anddesign was invested into producing a drilling program, which had little to noimpact on the current land use," said Greig Duncan, project director.

*According to Mining Weekly, theIndian government has straightened up the paymentsystem for the auction of 16 coal blocks in the country in June. Agovernment official said the upcoming auction will be the first time in 40years that noncaptive commercial coal mining will be opened to firms other thanstate-owned miners.

SPECIALTY

* The nuclear royal commission forecaststhat uranium prices will remain flat, with a recovery expected at the soonestin 2018, The Australian Financial Review reported.

* Paynes Find Gold Ltd. is looking to enter the lithiummarket with the acquisition of a project in Austria. The gold minerentered into a binding terms sheet to acquire 100% of European Lithium AT(Investments) Ltd., which owns 100% of ECM Lithium AT GmbH, a subsidiary entityof European LithiumLtd., and the Wolfsberg lithium project in Austria.

* Capricorn Metals Ltd. started the first stage of thecompany's asset sale process in Madagascar with the of its 1.5% net smelter royalty onEnergizer ResourcesInc.'s Molo graphite deposit. The royalty was sold to aCanadian investment group for an immediate cash payment of C$300,000. A furtherpayment of C$1.0 million in cash will be made once commercial production atMolo begins.

* Athabasca Minerals Inc. temporarily operations at the Susan Lakepublic pit and the corporate pits located within the Wood Buffalo region inAlberta due to the ongoing wildfires in Canada. Currently, there is no timeframe for the return of employees to operations.

* Alset Energy Corp. entered into abinding letter of intent with LitioMex SA de CV for the right to earna 100% interest in 10 minerals concessions covering 16 known lithium, potassiumand boron-rich salars and one mineral concession containing a Gypsum zone inMexico by paying US$210,000.

*The maiden ore reserve for IMXResources Ltd.'s Chilalo graphite project in Tanzania, based only onindicated resources, was estimated at 5.1 million tonnes grading 11.9% totalgraphitic carbon for 613,800 tonnes of contained graphite.

INDUSTRY NEWS

*Australian potash explorer RiverRock Energy Ltd. and China's King of Gold Group Co. Ltd. havebacked out of theirrespective plans to list on the ASX via an initial public offering, withneither explorer revealing the reason behind the decision to drop their plannedlistings.

*Mining investments in Argentina would reachUS$20 billion between 2016 and 2021 and generate 40,000 new jobs, adding to thecurrent 90,000 direct and indirect employees in the industry, Télam reported,citing mining chamber CAEM.

*The Bolivian government has reverted522 of the 793 mining concessions inspected by authorities in Potosí, Oruro, LaPaz, Cochabamba and Chuquisaca departments since 2014, Página Siete reported.

The Daily Dose is updated as of 7 a.m. London time, and scans newssources published in Chinese, English, Indonesian, Malay, Portuguese, Russian,Spanish, Thai and Ukrainian. Some external links may require a subscription.